Almost time for the machinist!

To answer your questions..........cleaning does remove paint.......blocks are baked in an oven to burn off grime and then shot blasted, when the block comes out of the shot blast cabinet it looks like a brand new piece of iron

Go with the least over bore as needed to clean up cylinders and piston availability; you can't overbore far enough to make any real difference in power as a result of displacement gained, vrs power lost to thin flexible cylinder bores, thick stable cylinder walls make power. A sonic check can/will tell you much. Buy your pistons before you bore the block so you have them on hand to measure and fit them to their respective cylinders......

Good luck